China Business, 11/03/07

According to an official with mobile phone retailer Zhongyu, Chinese mobile manufacturers are revamping their sales channels. Funding for local branches and offices is being reduced, and those with poor records are being closed, merged, or sold off to local agents.

According to industry insiders established brands started making these changes early this year, with others following suit.

Bird is currently shifting towards a direct supply plus agent system. This will see Bird let go of its local branches and offices and hand their business to local agents. Bird will supply products directly to larger retailers, while the agents will handle smaller outlets. Bird is also upgrading the company's logistics arrangements to work directly with the agents and retailers, rather than working via local branches.

Unlike the established brands, newer manufacturers have always operated this way, allowing them to pass the savings on to retailers. Established brands allow retailers profits of 25%, while new brands can offer up to 40%.